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AA Question Rote > Substantive Procedures Rote > Flashcards

Substantive Procedures Rote Flashcards

1
Q

Income (add up income to ledger TB)

A

Add up income recorded in general ledger and agree total to trial balance

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2
Q

Restructuring provision (add up restructuring to general ledger) Compare

A

Add up schedule of restructuring costs and agree total to general ledger

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3
Q

Loans (add up schedule bank loans agree to) compare

A

Add up schedule of bank loans and agree total to general ledger

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4
Q

Loans (Review FS confirm IFRS)

A

Review FS to confirm disclosures made in accordance with IFRS

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5
Q

Restructuring provision (Inspect FS disclosure IFRS)

A

Inspect FSs to confirm disclosure of provision in line with IFRS

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6
Q

Income => analytical procedure (income category investigate changes) Compare

A

Compare total income by category and investigate unexpected changes

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7
Q

Income => analytical procedure (sales to prior year unexpected) Compare

A

Compare sales to prior year and investigate unexpected changes

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8
Q

Restructuring provision Inspect (board meeting restructuring discussion)

A

Inspect minutes in board meeting to confirm restructuring was discussed

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9
Q

Restructuring provision Inspect (notice staff to SFP date)

A

Inspect notice sent to staff is before SFP date

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10
Q

Restructuring provision (inspect schedule restructuring costs validity provision)

A

Inspect schedule to confirm restructuring costs are acceptable as a provision

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11
Q

Loans Inspect (inspect agreement confirm interest)

A

Inspect loan agreement to confirm interest rate / repayment terms

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12
Q

Loans inspect (bank statement amount repayment)

A

Inspect bank statement to confirm AMOUNT of loan repayment made

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13
Q

Loans inspect (bank statement confirm receipt loan)

A

Inspect bank statement to confirm receipt of AMOUNT of loan

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14
Q

If significant increase in receivables collection period? (V) Calculate

A

Calculate receivables collection period and compare with last year to monitor any changes

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15
Q

Receivables and bank statement (post-yesr bank receivables convert to cash) Inspect (V)

A

Inspect post-year bank statement to verify whether receivables have been converted to cash

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16
Q

Allowance for doubtful debt (receivables) and management Enquiry (V)

A

Enquiry with managment about their assumptions for allowance of the doubtful debt

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17
Q

Trade receivables and written off (V) Discuss management whether need to be written up from aged receivable

A

Get aged receivables analysis and identify old receivables and discuss with management whether they need to be written off

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18
Q

Trade receivables and board minutes (V) Review

A

Review board minutes to verify whether there’s significant concern about whether a certain customer can pay

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19
Q

Trade receivables and increasing the allowance (V) Discuss rationale?

A

Discuss with the finance director the rationale behind not increasing the allowance for trade receivables

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20
Q

Disposals of NCA (breakdown and review NCA register writtenm off) Obtain

A

Obtain breakdown of disposals, review non-current assets register and determine what can be written off

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21
Q

Disposals of NCA (Recalculate profit agree TB)

A

Recalculate profit/loss on disposal and agree to trial balance and SPL

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22
Q

Disposals of NCA (Select sample documentation agree proceeds documentation) Compare

A

Select a sample of disposals and agree sale proceeds to supporting documentation (e.g sundry sales invoices)

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23
Q

Tax payable accrual (accrual prior year) Compare

A

Compare accrual for income in prior year, investigate any differences

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24
Q

Tax payable year-end general ledger accrual comparison Compare

A

Compare year-end tax payable accrual to general ledger and investigate any differences

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25
Q

Tax payable re-perform calculation accuracy discuss variances

A

Re-perform calculation on the accrual to confirm accuracy and discuss variances with management

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26
Q

Tax payable subsequent post cash book and statement completeness (subsequent payment confirm)

A

Agree subsequent payment to post year-end cash book and bank statements to confirm completeness

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27
Q

Tax payable and third parties (review correspondence, discuss additional agree accrual)

A

Review any correspondence with tax authoirites and discuss additional outstanding payments due, then agree to year-end accrual

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28
Q

Tax payable and disclosures (review disclosures income tax accrual IFRS)

A

Review any disclosures made to income tax accrual and assess whether this complies with IFRS

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29
Q

Provision for legal claim (discuss nature why amount provided)

A

Discuss with management the nature of the claim and why only AMOUNT provided

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30
Q

Provision for legal claim (review lawyers obtain outcome payment)

A

Review correspondence with lawyers and obtain the likely outcome and possibility of payment

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31
Q

Provision for legal claim (inspect correspondence customer recognised)

A

Inspect correspondence with customer about whether the provision should be recognised, and whether the amount is reasonable

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32
Q

Provision for legal claim (inspect post-year ledger cash compare FSs)

A

Inspect post year-end bank ledger and cash book to identify whether any payments have been made and compare these amounts to the FSs

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33
Q

Provision for legal claim (inspect board payment FD probable)

A

Inspect relevant board minutes and discuss with FD whether the payment is probable

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34
Q

Provision for legal claim (review FSs compliance IAS)

A

Review the FSs to ensure the accounting for provision in compliance with IAS 37

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35
Q

Provision for legal claim (obtain written representation valued)

A

Obtain written representation from management that provision is valued appropriately and is complete

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36
Q

Provision for legal claim (inspect FSs contingent compliance IAS)

A

Inspect FSs for contingent liability disclosures and ensure compliance with IAS 37

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37
Q

Provision for legal claim (discuss mislabelling likelihood customers)

A

Discuss mislabelling with management and assess the likelihood other customers have been affected

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38
Q

Trade payables (calculate period and compare year. variances)

A

Calculate payables payment period for current year and compare to last year. Discuss significant variances with management

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39
Q

Trade payables (compare payables and GRN prior)

A

Compare total payables and Goods Received Note accrual against prior year

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40
Q

Trade payables (compare list accruals fluctuations management)

A

Compare list of accruals this year to identify missing items/fluctuations and discuss with management

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41
Q

Trade payables (discuss payment run and materiality)

A

Discuss with management process undertaken to quantify misstatement due to payment run and consider materiality of errors

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42
Q

Trade payables (review journal payables errors included)

A

Review journal entry processed to correct misstatement of trade payables due to payment run to ensure errors ha ve been included

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43
Q

Trade payables (reperform reconciliations agree individual balances)

A

Reperform a sample of supplier statement reconciliations and agree to individual supplier balances. Investigate reconciling items

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44
Q

Trade payables (Select invoice review GRNs pre post)

A

Select a sample of purchase invocies, and review using GRNs whether these goods were included pre or post-year end

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45
Q

Trade payables (Select sample balances circularisation non-response)

A

Select sample of trade payables balances and perform trade payables’ circulisation. Follow up on non-responses

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46
Q

Revenue (Compare revenue year discuss prior)

A

Compare overall level of revenue against prior years and discuss with management any prior increases/decreases

47
Q

Revenue (Calculate gross fluctuations changes)

A

Calculate gross profit margin and compare to prior year, investigating any changes

48
Q

Revenue (Obtain schedule sales compare prior)

A

Obtain schedule of sales for stores in the year and compare against prior year

49
Q

Revenue (Calculate proof in total prior year increasing product)

A

Perform proof in total calculation for revenue by taking prior year revenue and increasing it for the new product lines

50
Q

Revenue (Select sales invoices price list accuracy)

A

Select a sample of sales invoices for customers and agree sales back to a price list. Confirm accuracy of such invoices

51
Q

Revenue (Recalculate invoice total discounts)

A

Recalculate ivoice totals including any tax and discounts

52
Q

Revenue (Select credit notes ensure invoice removed)

A

Select sample of credit notes raised, trace through original invoice and ensure invoice is removed from sales

53
Q

Revenue (Select despatch cut-off applied)

A

Select sample of despatch notes pre and post-period, follow these through to original invoice ensuring correct cut-off is applied

54
Q

Receivables (review receivables credit balances reclassify)

A

Review receivables ledger for any credit balances and assess whether they should be reclassified as payables

55
Q

Income (Discuss management advance deferred income SFP)

A

Discuss witrh management procedures to ensure advance ticket sales for September 20X5 are recognised as deferred income in SFP

56
Q

Income (Obtain schedule income confirm completeness trial balance)

A

Obtain schedule of company’s income and cost to confirm completeness and accuracy of balance and agree to trial balance

57
Q

Income (Select sample advance agree exclusion current inclusion deferred)

A

Seelct sample of advance ticket sales and agree their exclusion from current year income and follow through inclusion to deferred income

58
Q

Income (Compare sundry investigate compare previous)

A

Compare sundry sales to prior year sales data and compare to previous year

59
Q

Income (Sample donations documentation statements bank accurately)

A

Trace sample of donations from sign up documentation to bank statements, bank ledger account to ensure recorded accurately and completely

60
Q

Restructuring provision (obtain breakdown restructuring direct expenditure included)

A

Obtain breakdown of restructuring provision and confirm only direct expenditure is included in the provision

61
Q

Restructuring provision (review post-year payments compare costs amounts reasonable)

A

Review post year-end payments relating to expenditure and compare actual costs incurred to amount in provision to ensure its reasonable

62
Q

Bank loans (Agree quarterly repayment bank statement ledger)

A

Agree quarterly repayment of new loan to bank statement and bank ledger account

63
Q

Bank loans (Review agremeents covenants recalculate determine breaches)

A

Review loan agreements for details of covenants and recalculate covenants to determine any breaches

64
Q

Bank loans (Obtain confirmation outstanding balances. Amounts schedule)

A

Obtain direct confirmation at year end from loan provider of outstanding balances and security provided. Agree with these amounts to loan schedule

65
Q

Bank loans (Review correspondence early settlement SPL charge)

A

Review bank correspondence and loan agreements for early settlement charges included on loans repaid. Ensure settlement charges are recorded in SPL as finance cost

66
Q

Trade receivables (recalculate trade not recoverable compare allowance)

A

Recalculate level of trade receivables not recoverable and compare allowance and differences with management

67
Q

Sales tax liability (agree tax liability reconciliation submitted authority)

A

Agree year-end tax liability in TB to tax return submitted to tax authority

68
Q

Sales tax liability (compare sales prior year balance investigate)

A

Compare year-end sales tax liability to prior year balance or budget and investigate significant differences

69
Q

Sales tax liability (agree payment post-year ledger bank statements confirm)

A

Agree subsequent payment to post-year-end bank ledger account and bank statements to confirm completeness

70
Q

Sales tax liability (review liability disclosures current liability standards)

A

Review disclosures made of liability to ensure shown as current liability and assess compliance with accounting standards

71
Q

Receivables (Obtain receivables listing balance receivables TB)

A

Obtain aged receivables listing and agree to balance on trade receivables account and TB

72
Q

Receivables (Select GDN after customer balances period)

A

Select sample of GDNs before and after year-end, follow through to customer balances to ensure they are in correct accounting period

73
Q

Receivables (Select receivables balances agree valid documentation invoices GDN orders)

A

Select a sample of year-end receivables balances and agree to valid supporting documentation of sales invoices, GDNs and sales orders for existence

74
Q

Receivables (Sample receivables recorded balances original name customers order)

A

For a sample of receivables, agree balance recorded on list of customer balances to original name of customer on a sales order

75
Q

Redundancy provision (obtain breakdown employee ensure completeness TB)

A

Obtain breakdown of redundancy calculations by employee and cast to ensure completeness and agree TB

76
Q

Redundancy provision (before year-end review supporting verify announced)

A

If announced before year end, review supporting documentation to verify decision has been formally announced

77
Q

Redundancy provision (review provision compliance IAS)

A

Review the disclosure of the redundancy provision to ensure compliance with IAS 37

78
Q

Redundancy provision (discuss intent redundant confirming present obligation)

A

Discuss with directors to whether they announced their intention to close and make employees redundant, confirming present obligation

79
Q

Redundancy provision (recalculate provision completeness agree employee)

A

Recalculate redundancy provision to confirm completeness and agree calculation to supporting documentation such as employee contracts

80
Q

Redundancy provision (review disclosure ensure compliance)

A

Review disclosure of redundancy provision to ensure compliance with IAS 37

81
Q

Redundancy provision (obtain representation completeness provision)

A

Obtain written representation from management to confirm completeness of provision

82
Q

Trade payables (Select payables circulisation, follow up non-replies confirmed balanced)

A

Select sample of payables balances and perform trade payables’ circulisation, follow up on non-replies between balance confirmed and trade payables’ balanced

83
Q

Trade payables (casting payables listing tb FS)

A

Casting payables listing and agreeing to TB and FSs

84
Q

Trade payables (suppleir rec investingate items)

A

Perform supplier reconciliations and investigate any reconciling items

85
Q

Trade receivables (review after cash receipts pre-year receivables)

A

Review after-date cash receipts and follow through to pre-year-end receivables balance

86
Q

Is reviewing the sales invoices relating to overdue accounts good for valuation assertion?

A

BAD, as it can’t be compared to previous years

87
Q

What do sequence checks on sales invoices provide evidence of?

A

The completeness of sales

88
Q

Prepayments (compare prepayments previous year)

A

Compare the level of prepayments to previous year to ensure completeness

89
Q

Prepayments (Review SFP prepayments included)

A

Review SFP to ensure all prepayments hjave been included

90
Q

Prepayments (Sample prepayment listing recalculate accurate calculation)

A

Sample of preayments from prepayments listing, recalculate amount repaid to ensure accurate calculation

91
Q

Prepayments (Verify reference invoices cash correspondence)

A

Verify by reference to invoices, cash book and correspondence

92
Q

Positive receivables circulisation (obtain director advance circulisation)

A

Obtain consent from finance director in advance of undertaking the circulisation

93
Q

Positive receivables circulisation (FD request letters member)

A

FD should be requested to sign all letters prior to them sent out by a member of the audit team

94
Q

Positive receivables circulisation (select sample receivables list nil credit balances)

A

Select sample from receivables list showing nil, old, credit and large balances

95
Q

Positive receivables circulisation (no response vs response)

A

No response - follow up with another letter

Response - reconciled to receivables records

96
Q

Trade receivables (sample GDN agree SI customer)

A

Select a sample of GDN before year-end, agree to SI and to inclusion in year-end list of individual customer balances

97
Q

Trade receivables (recalculate allowance compare irrecoverable balances allowances adequate)

A

Recalculate the allowance for trade receivables and compare any potential irrecoverable balances to assess if allowance is adequate

98
Q

Trade payables (calculate period credit significant)

A

Calculate trade payables period, compare credit terms from prior year and discuss differences with management

99
Q

Purchases (Calculate profit compare budget investigate difference)

A

Calculate operating profit and compare prior year to budget and investigate any differences

100
Q

Purchases (Review purchases line compare significant)

A

Review annual purchases and other expenses on a line-by-line basis, compare prior year and investigate any significant differences

101
Q

Purchases (Recalculate prepayments accruals accuracy SPL)

A

Recalculate year-end prepayments and accruals to ensure accuracy of expense charged in SPL

102
Q

Purchases (sample invoices post expenses current year accrued)

A

Select a sample of post-year-end expense invoices ensure expenses relating to current year have been accrued

103
Q

Purchases (select GRN agree PI ensure completeness)

A

Select sample of GRN and agree PI and purchase listing to ensure completeness of purchases

104
Q

Purchases (select sample payments bank expense ledger classified)

A

Select a sample of expense payments from bank ledger and trace relevant expense in general ledger to ensure expense is classified properly

105
Q

Employment tax payable (compare accrual payable prior investigate)

A

Compare accrual for employment tax payable to prior year, investigate significant differences

106
Q

Employment tax payable (agree year-end employment accrual records accuracy)

A

Agree year-end employment tax payable accrual to payroll records to confirm accuracy

107
Q

Employment tax payable (reperform calculation accrual sample employees confirm)

A

Reperform calculation of accrual for sample of employees to confirm accuracy

108
Q

Employment tax payable (subsequent payment post ledger statement completeness)

A

Agree subsequent payment to post-year-end bank ledger account and bank statement to confirm completeness

109
Q

Employment tax payable (review disclosure accrual assess compliance legislation)

A

Review disclosures made of employment tax accrual and assess compliance with legislation

110
Q

Employment tax payable (review correspondence authorities outstanding payments accrual)

A

Review correspondence with tax authorities to assess outstanding payments due, if so confirm in year-end accrual

111
Q

Purchases (GRNs agree PI listing completeness purchases)

A

Select sample of GRNs throughout the year agree to purchase invoices and detailed purchase listing to ensure completeness of purchases

112
Q

Income tax payable (recalculate accrual accuracy)

A

Recalculate accrual to confirm accuracy

113
Q

Income tax payable (agree subsequent post-year ledger statement confirm completeness)

A

Agree subsequent payment to post-year-end bank ledger account and bank statements to confirm completeness

114
Q

Income tax payable (review disclosures income accrual compliance legislation)

A

Review any disclosures made of income tax accrual and assess whether these are in compliance with legislation

AA Question Rote (29 decks)

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